Saving the economy from our brains

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– James Saft is a Reuters columnist. The opinions expressed are his own –

Our brains are wired for bubbles, it would appear, and regulation and tight external controls are the only way to save ourselves from ourselves.

Bankers, traders and investors effectively became addicted to the pleasure that comes from making money, while at the same time increasingly losing touch with just how much risk they were taking.

The result was a bubble in risk taking, debt and many financial assets and the inevitable crash and complete pull back in activity.

“The finance industry was adapting to the level of risk,” said Gregory Berns, a professor of neuroeconomics at Emory University in Atlanta who uses brain scanning technologies to try and decode the decision-making systems of the brain.

“It is an insidious process, you are not aware of it. You are addicted to returns, you are addicted to risk, you are addicted to cocaine — it’s all the same as far the brain goes.”

Berns, who says that the brain has no mechanism for being satisfied, compares the process of becoming adjusted to new stimulus such as making money or taking risks to the eyes adjusting to the light; while at first it seems bright, your brain adjusts and you no longer perceive the light as bright, the money as enough, the risk as high.

So in order to get the same buzz from making money you have to up the stimulus, doing more of what it was that brought in the money in the first place. At the same time your perception of risk becomes less sharp.

So with the same regret that a recovered alcoholic looks back on driving after seven martinis, we all now look back on an investment bank with a 40-1 leverage ratio.

Seemed like a good idea at the time, but an addiction like any other. Berns, an outsider to finance, looks at other addictions and concludes that what’s most likely to succeed is a system of controls imposed from outside, namely government regulation.

“It needs an imposition from outside; addicts have a difficult time self-treating, it needs structure.”
But that of course is complicated by the fact that what government and the rest of us want the banking industry to do is not go off risk cold turkey but to control the amount of risk it takes so that enough credit is created to allow the economy to grow. So it’s a bit like a 12-step addiction program that meets in a bar and in which the object is not sobriety but being just pleasantly tipsy. It’s a hard ask.

SOMEONE TO WATCH OVER ME

People who are against government regulation will say: why do we think governments are going to be better at figuring out what is risky? But if you look at it from the point of view both of compensation and conflicts of interests, and of brain chemistry and psychology, you will see that is not the point.

Governments are probably marginally more hopeless than bankers or the markets at figuring out what is what in the beginning, just as the guy in the risk department at Big Bank plc knows a lot less about the derivative market than the physics PhD he has to oversee. But the person with the most to gain from the activity is the person most likely to have his opinions distorted over time. The important thing is to be beholden to someone with oversight and power who will check your natural tendency to get carried away.

We simply need outside controls, both in terms of company controls and government controls, to help stop us from deluding ourselves.

James Montier, a strategist at Societe Generalein London and an expert in behavioral finance, says that our beliefs about our abilities and future behavior is often profoundly out of step with reality.

People believe they will act in one way when contemplating an emergency, for example, and then act in quite a different one in the heat of the moment. The solution is harder rules and more process, just as data has shown that even the most experienced surgeons have better outcomes if they use something as simple as a checklist.

“What it drives you to is the primary role that process has to play in investment,” Montier said.
“You can’t control return, can’t control risk; all we can control is how you approach investment.”

The fact is that controls are needed. Parts of the system like hedge funds which have no call on state insurance if their bets go bad would be well advised to put in their own controls. Those parts which we all seem to be insuring need to have those controls imposed from on high.

Those controls will be circumvented and worn away by future successes, but that is no reason not to try.

– At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. For previous columns by James Saft, click here. . –

It appears to me that the major source of failure can be laid squarely at the feet of the Board of Directors of each of the troubled banks.These educated people are supposed to be the “guiding light” of each company but, as is very apparent, their heads are in the clouds.These are the folks giving the senior executives their outlandish pay packages. They are the ones, via their various board activities that are supposed to be watching out for the share holders. I think that the only thing they have really succeeded in doing right now is staying out of the lime light.While their presence as a member of the Board of Directors cannot be denied, what has happened to the economy is reason #1 why a company CEO should not be allowed to hold dual CEO and Chairmanship positions within any one one company.

Military commanders impose rules of engagement on combat troops to define and limit risk. The more successful a combat veteran becomes the easier it can become to risk his fellow troops. Unlike the alocholic who must quit entirely, the infantryman must be told when and to what extent he can shoot the enemy.ISO Quality Management Systems require definition of process and knowing when your process is under control.As both a veteran and a manufacturing company manager I have been working under oversight all my adult life.The financial industry as a whole became numb to risk and had no effective outside board of directors or command generals to limit them. It sounds a lot like what happened to the German people leading up to and through WWII. A group think fed itself until they thought they were superior and invincible. It became easy to vilify and kill scapegoats (Jews, intellectuals, homosexuals, gypsies, etc.)In the financial bubble that has burst,the brains of Wall St. find that they are not invincible, and many innocent victims (investors) have been harmed. Some sort of outside oversight is sorely needed and it has to be outside enough not to get corrupted by the group think.

I think its a small part of the problem. The major cause of the collapse is that its all reward and no risk for the wall street types. Look at say Stan O’Neal for example, he paid himself 10s of millions of dollars every year without fail. Then when the music stopped he ended up with something like a 50 million dollar parchute. Very small part, if any, of the reward goes to the shareholder, it all goes to the executives. On the other hand all of the risk is taken by the shareholder and none by the executives.When are there going to be criminal indictments against some of these people? I bet there will none.

People love to cast blame but as the article indicates, without enforceable controls people cannot be trusted to handle excess. That includes you and me. Until folks admit that eventually EVERYONE gives into temptation the same mistakes will continue repeating themselves. Checks and balances are essential for a quality life. Do presume that there are people out there strong enough to be totally honest in the face of money and power is pure delusion. We all need rules to live by, and the rich and powerful need them the most.

Neural science and behavioralism I am sure play some role. But the primary problem is incorrect information. When a banker lends money, he expects repayment of principal and interest. This general idea has been largely misapplied to equities. So if we buy a stock for $65.00 distributing $0.50 quarterly, repayment of principal would occur in 32.5 years. However we look at EPS and growth rates. We assume somebody will offer to buy the shares to cover at least principal. During this 32.5 years we assume the company will never have any competition forcing down profit margins. Competition – hah, right. The fact that few companies last more than 20 years is completely besides the point. Now we have a scenario where people know flat out that market prices are being artificially inflated by a large market player – the federal government. They prefer playing stocks rather than using public funds to create jobs. Usually I would say, more power to them. Because market manipulators should be rewarded for their risks. Unfortunately this time there is a direct link between the player and the tax coffers.

While I generally admire James Saft’s penetrating analysis, in this case I think it is really making an excuse for criminal behavior in the corporatist ranks. And it is not just the financial corporations.One must remember that we still have a foundation of law that is not being utilized to keep conflict of interest, and outright piracy in check. Anyone remember terms like fiduciary responsibility, malfeasance, misfeasance and nonfeasance? We already have the regulation we need to arrest these corporatist pirates and confiscate their ill-gotten gains. This would send a shockwave out into the management ranks which generate fear, the only thing that will stop the piracy that is continuing as we dawdle.Under Bush it became clear that lawlessness was the norm and so everyone and his brother got into the act. We are now going over the cliff and the only lifeline we have is these quaint concepts of law. I think we need to get back to where we once belonged.

Publicly Audit the US Federal Reserve (a private corp aka the Fed); End the Fed.Banks should be limited to and stick to keeping deposits and loaning prudently. This applies whether it is thin-air (Federal Reserve Notes), asset backed securities, jewels, silver, gold, etc. Sweepstakes and casinos, such as JP Morgan and Goldman Sachs lost the privilege of the use of the word “Bank” and government guarantees from their name and business.Getting worse, William Dudley, the new NY Fed Governor wrote a persuasive aregument that was the basis for eliminating “Glass-Steagal Act” (unlawful to merge Banks with Insurance or Securities). “Glass-Steagal was unforturnately repealed in 1999 (under Clinton’s watch).Quote from Reuters Jan 27, 2009: Dudley to Succeed Geithner at NY Fed”He had joined Goldman Sachs in 1986, working in a number of capacities, including as former Treasury Secretary Robert Rubin’s senior economic adviser.Prior to his years at Goldman, Dudley was in charge of regulatory analysis at J.P. Morgan, where he co-authored a pamphlet that advocated repealing the Glass-Steagall Act, a law put in place during the Great Depression to separate commercial and investment banking. Some economists have criticized the repeal of Glass-Steagall in 1999 as paving the way for the risk-taking that has led to the current crisis.”Here is the Reuters link:http://www.reuters.com/article/topN ews/idUSTRE50Q0SN20090127

“So it’s a bit like a 12-step addiction program that meets in a bar and in which the object is not sobriety but being just pleasantly tipsy.”What a perfect (and perfectly hilarious) statement! Thanks for the laugh!

Bias is a part of the human condition that gets us in a lot of trouble. Jonathan Cole attributes all the problems to Bush.This financial and economic problem began long before Bush. One of the few things Bush got correct was to try to limit the excesses of Fannie Mae and Freddie Mac, but was prevented by Democrats who were obtaining large sums from FNM and FRE, namely Frank and Dodd.The source of the problem is government, which set up institutions that were part socialistic and part private. Being able to sell mortgages to FNM and FRE changed the incentive from making good loans to the incentive of making loans in volume. Who cares what the quality of the loan is if you can make a loan for a $800,000 house to an itinerant worker making $12,000, and then sell the loan to FNM. Add to that ACORN and HUD forcing banks to make such loans. What do you expect?

Greed is like any other addition, it begets more greed and it keeps building to the point of the bubble bursting. It is like the drug user that knows not end until he has used to much.When you get to the very top of the mountain, the only way you can go is down. I do not understand why so many so called educated people do not understand this.Christ did not go to the rich or the powerful or those who were supposedly the leading religious of his day. Pastors of today say we are gods church, but I am not sure that when Christ comes again he will come to church. We may be very disappointed. He will ask the same questions he asked before. Did you feed the hungry, did you clothe the naked, did you heal the sick, did you console the sorrowful and those beaten down? How many did you raise up and feed and clothe, how many did you give heat when it was cold, how many did you house?He went to the poor, the sick, the hungry, the lowly, the outcasts, the sinners and he gave them the good news, he healed the sick and gave the uneducated wisdom and his power to heal the sick and spread the good news.For two thousand years the educated should know that, but they think they are smarter than all before them. They do not understand that when enough is enough, they do not understand the basic fundamentals of life.

Some time ago, the USA National Institute of Mental Health reported on a study that found that normal people are mildly manic; too optimistic.Re these high-flyers, DID they get hurt? WERE they taking a risk? Losing business to a more reckless competitor was intolerable, and risks on the other side, in their actual effect on these people, were minor.This reminds me of myself and consumer products. Who hasn’t done it: You buy a coffeemaker with plastic so full of a stinking, foul plasticizer that you have to throw it out, or a scanner with bad software, and you put it in the dumpster, because you know that it’s just not going to be worth your time to seek redress? We’re used to that way of buying now.I heard of a USA con artist who went to Europe and took out ads telling people they’d make a million dollars (or local equivalent) in six months. The guy was floored to find himself doing a prison term because some of his customers didn’t make a million dollars in six months.

Once upon a time, the financial industry was subject to a strictly enforced outside control: it was called the Gold Standard. But governments refused to submit to its discipline because it prevented them from financing unjustified wars and outrageous boondoggles. When government becomes dishonest, it is only a matter of time until the citizens will follow the example set by authority.

No one knows better than the bank – as in the ‘bank’ at a casino – that human nature is to inaccurately assess risk and to fail at establishing and maintaining appropriate discipline.The core problem – and, like the recurrence of war and other comparable catastrophes it is incapable of ‘solution’ – is the disposition of the social dynamic and its inability to effectively ‘learn’.After a crash, panic, or other financial catastrophe, as in the aftermath of a war, certain ‘lessons’ are ‘learned’. Often the ‘lessons’ are false, and essentially reflective of the perceived outcome, eg, after the Depression of the 1930s the ‘lesson’ was ‘learned’ that government could guarantee banks and the problem of bank failure (in the absolute sense) would not recur. This ‘lesson’, reinforced by routine FDIC actions on a small scale and larger scale actions such as the thrift takeover/bailout became ‘truth’ and, of course, failed to take into account the nasty little detail that government, if it was not very careful, now had placed itself in the de facto position of The Last Banker – which situation is now effectively realized if not yet fully acknowledged.The particular American expansionist disposition is of extreme form. It is deeply rooted in American culture that it is ‘true’ that ‘freedom’ results in material wealth, and that material wealth is equivalent to the greatest social good. Even now, in a catastrophic situation, there is a clinging to the ‘truth’ that ‘free markets’ are best, that large financial institutions serve best when least restrained by government, etc. The very fact that at present we are (temporarily) in a period of thinking ‘well it’s bad but it’s not all that bad, the world isn’t ending, after all’ is reflective of the short term character of emotional response on the individual and social level coupled with the particularly American insistence financial excesses are self-correcting.Well, from the Martian perspective, yes, they’re self-correcting. Unfortunately that self-correction if not intelligently addressed may well be horrifically destructive, and, yes, as witness Iceland, topple governments.Of course that can’t happen in America . . .Then again . . .

I think that in addition to the research of prof Berns, the human mind is also incapable of planning beyond it’s current situation.The old military maxim ‘when at peace, plan for war’ has it’s foundation in this inability… it is set to remind soldiers that situations change – and usually rapidly. It also reminds soldiers that it is usually too late to start planning once the situation had changed.Even with this maxim, the military often fails (even more so on the converse – the invasion of Iraq being a case in point).That makes me wonder: how many enterprises are planning for the (eventual) upturn? Because we all know that there *will* be an upturn eventually. Or are they all scampering about, over-reacting to ever-more depressing developments as these take place?And when the next upturn hits us, how many enterprises will bother to remember the lean years and plan for the next down-turn? No wait… don’t tell me, let me guess… zero?So where does that leave us? As Dory in “Finding Nemo” says: “I don’t know where I am… I don’t know what’s going on. I think I lost somebody but I, I can’t remember… and I can’t remember…”

While I am sure there is the associated adrenaline rush with the game, the underlying dynamic is the competitive drive of the market. If one fund can show better returns it will draw more investment and prestige, other funds, many less well managed need to compete with this. As the returns increase so do investors expectations, which increases the competitive pressure between the funds. It may be easy to dismiss the dynamic as something we are hard wired for, but that is something akin to to alchoholic saying the disease travels in my family, there is still something else that makes you pick up the glass.

Salter wrote, “Who cares what the quality of the loan is if you can make a loan for a $800,000 house to an itinerant worker making $12,000, and then sell the loan to FNM. Add to that ACORN and HUD forcing banks to make such loans. What do you expect?”None of those things were happening under the prior Clinton Administration. The irony is that after the globalists finally convinced the centrist Democrats of the overall positive effects of deregulation, free capital flows, and “innovation” in financial markets, Glass-Steagal was repealed. Little could the technocrat Democrats imagine the outcomes of this when coupled with a catastrophic, reckless disdain for accountability, rules, law, and that together with crony capitalism that was the rule under Bush. This was a betrayal of the highest order in U.S. history.The Democrats real flaw was gutless, acquiescence to these traitors, becoming themselves accomplices to the crime. They had a duty to demand impeachment. Instead they took it off the table. That was the beginning of the end.

There current market problems stem from gimmickry by too many traders & their companies.İt is all a big crap shoot with others money at risk but the profit goes to the player (trader).The stock market is a big enough gamble in itself but at least there is supposed to be something solid behind the stocks.The derivatives and hedge funds are just pushing paper with too little or nothing behind them. They should be outlawed.İ believe one of the whistle blowers in the Madoff case has stated that any party which did due diligence studies had not invested with Madoff as the fundamentals were not there.

Well, some people’s brains may be wired for bubbles the same way as some people are alcoholics. However, most people are not.The process described here as needing ever more stimulation to feel satisfaction is also know as “desensitization”, after taking some blows your body becomes numb.The difference between alcoholics and bankers is a striking and important one: Alcoholics mostly hurt themselves, and maybe there close relatives, whereas bankers addictions hurt all people and society as a whole.The idea of controlling this is liking saying to an alcoholic, “well, you can still drink, but only this much.” We all know that this doesn’t work with drug addicts. First there must be a will of the addict to stop and then he has to stop completely.The will then still be addicts, but clean ones.With derivatives it’s the same, they should be abolished.

The problem with regulation is that it never identifies the latest risk – only the previous one. The nature of the particular risk changes and so does the perception of it – by regulators as well as traders. There is a mechanism that deals with imbalances unimagined by traders or regulators. It is called the market. As we are finding out, it works – maybe not as quickly as we might like, but really, really well.

I agree rules are important but what have we seen in this crises? Even with a lot of rules around the people who had to act on these rules looked the other way and as such deluded the public into unsafe investments.So, the cry by Henry Kissenger for a new world order is a cry for the U.S.A. to regain power on an other way.Not the lacking of rules made this crises possible as we have seen in Europe for instance where every country needed an other crises anti-dope. Far from being one Europe better is to be united as separate sovereign countries in talkings but not in building up a to big to handle very corrupting massive molog institute which the powermad very much like to see.

People have known this in generations past and understood that boundaries had to placed on public officials. I would think that CEOs of public companies also need to be held to some boundaries because of the amount of damage they can do to society.From Wikepedia:”The concept of the public trust relates back to the origins of democratic government and its seminal idea that within the public lies the true power and future of a society; therefore, whatever trust the public places in its officials must be respected.One of the reasons that bribery is regarded as a notorious evil is that it contributes to a culture of corruption in which the public trust is eroded.A famous example of the betrayal of public trust is in the story of Julius Caesar, who was killed by Roman senators who believed they had to act drastically to preserve the republic against his alleged monarchical ambitions.”

Exactly!!! There’s really no logical reason to buy stocks these days, but every time that there is a glimmer of hope (usually news containing the words “stimulus” and/or “bailout”), there’s a “sucker’s rally”. The reason? Nostalgia. Remember those good old coupon-clipping days. Oh what fun it was to review the evening stock market results and calculate the increase in your personal wealth. All this reminds me of a poem by Edgar Alan Poe:”When will is see my lost Lenore?Quoth the raven, “Never more”.

‘Those who do not know history are condemned to repeat it!We’ll have another ‘bubble,’ in another fifty or sixty years. Such is the nature of our dual existence, as all things come and go in cycles. One extreme seeking its opposite (enantiodromia).We had a ‘liberal’ cycle with FDR.Then Reagan came along and we’ve had a disastrous ‘conservative’ cycle.Back and forth we go, as we never learn!

There are many stories and dimensional views about the present crisis. But if we look at it seriously, IT IS A HUMAN LUST FOR MONEY. For last one and half decades globally every institutes is busy making their money double with each passing year. The new generation of MBA’s saying ‘in business every thing is possible’ and keep applying extra aggressive tactics to achieve their motives, now entire world is paying the price.

I don’t get why some people just don’t “get it” and still want to say that “the market works” and there shouldn’t be regulations governing HOW it works. Kind of like saying there shouldn’t be speed limits or safety standards: if someone goes too fast, their auto will simply blow a tire, blow an engine, spin wildly out of control and kill 30 members of a boy scout group on a bus, or some other event that ends up slowing the driver down. Any damage caused is irrelevant, since the driver did end up slowing down, didn’t he? If I put my money in a bank, I want to get it back. The only way that’s going to happen is if there are rules about how that money is to be handled in the meantime. In this case they weren’t remotely adequate, and the US has completely blown their credibility as a financially responsible nation. Their days of importance are numbered.

“Berns, who says the brain has no mechanism for being satisfied…”The brain does have a mechanism for being satisfied. It’s located in the mind. It’s called gratitude. Gratitude, being of the mind, is a stronger emotion than lust, which is limited to the brain. Addictions, whether uncontrolled risk taking, or anything else, are uncontrolled lusts. Gratitude trumps lust. One cannot experience anger, or any number of lusts, while experiencing real individual gratitude. Addiction wisdom teaches us to access individual gratitude to control our lust. Religious wisdom teaches us to access individual gratitude through prayer. Folk wisdom teaches us to access individual gratitude by counting our blessings. When the mind accesses gratitude, it overcomes the brains lust. But there is no wisdom that teaches institutional access to gratitude. No wisdom that allows it because institutions function mindlessly to be successfull. The basic amorality of the institutional growth philosophy: Only responsible to the stockholders, must have growth, nothing else counts or matters, is a group think philosophy, precluding individual think. Institutions exploit individuals; first and foremost those individuals who work for institutional growth, who must adopt the amoral institutional philosophy to succeed. The true conflict we face today is resolving the institutional philosophy of success with the individual philosophy of success. World wide, individual taxpayers are being asked to fund financial institution losses. At some point soon we must face the fact that institutions must be allowed to fail, just like individuals. The whole institutional mindset must fail, in the form of the institution, before we will have an opportunity to change it for the better.

The most important thing you as an individual can do to improve the current financial climate in your neighborhood is take all your money out of the multinational bank you currently use and put it in your local credit union. Period. It’s the one act available to all of us that puts us back in local control of our money.

The West has put too much confidence in the unbridled market economy not taking into account the fact that man is intrisincally greedy and self centred. I sure is addititive making money especially when it not yours and the so called gurus of finance have been given too much leeway to come up with products which are so complex that nobody seems to understand how they work and is sold just because they are marketed by so called reputable firms backed by rating agencies.

governments get elected by providing the populace with the things they want, and get punished for telling the american public they can’t have what they want. It should come as no surprise therefore that bubbles are encouraged at the expense of long term stability. I’d advise almost everyone to read what marc faber has to tell you. governments can intervene to prop up the economy only if they also work to minimize bubbles in a counter cyclical behavior. Until we are willing to accept this we have to realize washington will do everything in its power to get reelected ensuring the problem is delayed for a time further down the road for someone else to deal with. This is the nature of human behavior and to expect otherwise is foolish.

We are looking for a scapgoat and we have found all of them who were greedy enough to cut the same branch they were sitting on.They all are Bernard Madoff of the world and some did out of greed mostly other people’s money and also they were selected group of one or two racial backgrounds,Enough said.peace to everybody in mind and soul.

There are many culprits in this fiesta of idiocy. A society driven by instant gratification and by rag-to-riches myths is as much at fault as a bunch of bankers trying to make billions out of millions. The latter are virtually criminal (and as a journalist I actually heard bankers congratulating themselves for making 300 % on some schemes, while paying out 10 or 12 %. Still: bacteria require a nourishing medium to proliferate. Society’s collective ethical compass was dumped by Ronald Reagan. Let us hope that we can recover it.

Mr. Saft. What rot!Governments set fiscal policy. Central banks set monetary policy. They collectively decide whether or not they are going to run debts and deficits that need to be financed. And they control both the cost and quantity of money via interest rates. Although it is hard for central banks to control both at the same time. Excess money supply creation means that money has to be invested somewhere even if the rates of return do not justify the risk being taken.Low real interest rates, in many cases zero or negative, encourage risk taking as borrowed money is essentially free. But governments love it when banks, investors and traders make money because then they get their cut via taxes. Taxes that can then be shared with voters to ensure that governments made up of politicians get re-elected.Balance budgets and pay down debt, while keeping real interest rates neutral and currencies at their trade-weight adjusted value, and you go a long ways to making financial systems both more robust and stable.We are in the worst credit crisis and financial meltdown in generations. Quite frankly I am getting quite tired of Monday morning quarterbacks – financial journalists such as yourself – constantly banging on about how banks, traders and investors created this mess when really their true cause were the build-up of global financial imbalances caused by excessive money supply creation and the rapid expansion of credit as well as central bank manipulation of currencies to remain export competitive.Why it is so annoying is because the only difference between a recession and a depression is the policy response to such a crisis. If you do not understand the causes of the crisis you cannot formulate a responsible public policy response. Seriously Reuters needs to find some financial reporters that understand both macro-economics AND finance. Opinions alone just do not cut it. I am not addicted to risk. I am allergic to mediocracy.

The comments regarding the misguided corporate philospohy that forces individuals to step in line or get out of the way is the sad truth of todays society. There is no room for even a slight doubt or failure. Once you show a weakness there will be a punishment, company or individual level. No room for high moral standards. I get sick hearing CEO’s preach the crap about leadership, mentoring, team building etc. It seems the bigger the failure the meager the consequences provided you are high up in the hierarchy. So what does a regular guy do – carry on being exploited simply because you’re doomed otherwise. In that environment fraud, risk-taking, deceit will flourish.

The previous comment re. credit unions is spot on. Banksters are bankrupting the system and the global economy. The effect of the gradual befogged the windshield: Ample warnings were out there for a very long time. Here in the US, a common, longstanding comment is: Where do you put it? … Under the mattress isn’t good enough. When I moved here from Toronto two decades ago, I found the fear and cynicism over the safety of one’s assets quite shocking.